Partnerships to help control Ill. Medicaid costs

CARLA K. JOHNSON, AP Medical Writer

Wednesday, 17 Oct 2012 | 8:42 AM ETThe Associated Press

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CHICAGO -- A for-profit nursing home company owned by a politically connected Chicago businessman is a partner in a project Illinois Gov. Pat Quinn announced Tuesday that aims to control health spending for high-cost Medicaid recipients.

The selection of MADO Management raised questions from one advocate for nursing home residents, who pointed to some MADO facilities' below-average staffing levels and violations found by regulators during inspections. But a state official said it's important for a nursing home operator to be involved as the state moves more mentally ill residents into group homes and independent living apartments, and MADO, owned by businessman Peter O'Brien, is the only one that applied.

O'Brien has been appointed to a state board and his late brother, Daniel O'Brien Jr., was a state senator and representative. But O'Brien's political connections didn't affect the selection, said Mark Mroz of MADO's health care unit. The 600-page proposal met every specification and came from "a large collaboration that stood the same chance as anyone else did in receiving this opportunity."

On his political involvement, O'Brien said he's never shied away from taking an active stance "when I thought that I could make a difference where I live and work" and he said MADO Healthcare "consistently meets industry standards" caring for people with mental illness. O'Brien added that his late son, also named Peter, was diagnosed with a serious mental illness when he was a college freshman.

"It was his journey that brought me to the realization of the need for a system for coordinated care for persons with serious mental illness _ a person-centered program that follows those that suffer with this illness through their needs of hospitalization, rehabilitation and community care," O'Brien said.

In a news release, Quinn announced six "coordinated care" partnerships that will help Illinois comply with a state law requiring that at least half of Illinois Medicaid recipients be moved into managed care by 2015.

Instead of turning most of Medicaid over to national for-profit managed care companies, state officials are opening some contracts to Illinois health care providers such as hospitals and mental health centers. The hope is they could work together to lower costs and eliminate unnecessary care _ including some emergency room visits _ while still serving patients' needs. It's those collaborative projects that were announced Tuesday.

Contracts haven't yet been negotiated. But most of the projects will receive fees for coordinating patient care, share savings with the state and be subject to financial penalties if they don't meet certain quality standards.

Most of the six projects are run by nonprofits such as hospitals and government health agencies. A nonprofit on Chicago's South Side called the Healthcare Consortium of Illinois will lead one network, for example. A group of hospitals and mental health centers will focus on nine counties in northwest and central Illinois. The Macon County Mental Health Board in Decatur will lead another partnership. Heartland Health Outreach in Cook County and the Community Care Alliance of Illinois, both nonprofits, were also named.

Overall, the six projects will coordinate care for up to 6,000 Medicaid recipients. The project is aimed at the costliest patients for Medicaid _ the elderly and disabled.

The severely mentally ill are the focus of a project called Be Well Partners in Health, which involves MADO Management, a family-owned business run by Peter O'Brien, a contributor to Democratic candidates for state offices, including Quinn. MADO will work in partnership with several nonprofits, including one led by former Illinois Department of Public Health administrator Teresa Garate.

Garate, who started Sept. 1 as CEO of Neumann Family Services, a nonprofit that runs groups homes for people with developmental disabilities and mental illnesses, told The Associated Press on Tuesday that she has confidence in O'Brien's commitment.

The MADO company, Garate said, realizes "this is a changing landscape and this is the wave of the future to serve people (with mental illness) in more integrated community settings." She noted that Illinois has settled a class action lawsuit that requires the state's Medicaid program to make sure people with mental illness have the opportunity to live in group homes or independently in their own apartments.

Garate said she wasn't surprised some of the MADO nursing facilities have been cited during state inspections. Few nursing homes have perfect records.

"What's important is the way they respond and their corrective action plans," Garate said.

But Wendy Meltzer of Illinois Citizens for Better Care said MADO has no track record of helping nursing home residents with severe mental illness live more independently. For example, Sacred Heart Home, one of the MADO facilities in Chicago, gets a below average, two-star rating from the federal government's Nursing Home Compare website, and the home was cited for failing to provide rehabilitation services for a resident, among other health and safety violations.

"I'm just astonished. I'm just flabbergasted," Meltzer said of the selection of MADO for a role in the coordinated care project. "I don't understand treating any nursing home owners with no track record ... as if they have expertise in doing that."

Jim Parker, deputy administrator of medical programs for the Illinois Department of Healthcare and Family Services, said it's important for nursing home owners to be "part of the solution" and MADO has been willing to change its business model.

"Here's a nursing home owner that's been one of few to step up to the table and say we're willing to try a different model and collaborate with other providers in moving people into the community," Parker said, adding that MADO was the only nursing home owner that applied for a coordinated care contract.

Mroz of MADO Healthcare is the president of the board of Be Well Partners in Health. He said MADO has been collaborating with the state for three years by participating in the process that led to the 2010 nursing home reform law. The company wants to transition "from long-term care to rehabilitation and recovery services," he said.